72632 v1 World Trade Indicators 2009/10 Haiti Trade Brief Trade Policy subsidies on imported rice, reducing the price of a 50 kilogram bag of rice by 15 percent.1 As a member of the Caribbean Community and Common Market (CARICOM), Haiti applies the group’s Common External Tariff (CET). By External Environment eliminating its export duties, simplifying and lowering The simple average of the overall rest of the world its applied tariff rates, and abolishing the majority of tariff (including preferences) faced by the country’s its quantitative restrictions, Haiti has greatly liberalized exports is 9.8 percent. When its trade flows are taken its trade regime since 1986. For the last several years, into consideration, it is apparent that Haiti’s exports Haiti’s simple average MFN tariff has remained have better access to international markets that those constant at 2.8 percent, much lower than that of an of its comparators. Haiti’s weighted rest of the world average Latin America and Caribbean (LAC) or low- tariff (including preferences) is 0.7 percent, lower than income country (9.3 and 12.7 percent, respectively). the regional and income group averages of 3.2 and 3.9 Based on the MFN applied tariff, it ranks 8th out of percent, respectively. The weighted rest of the world 181 countries (where 1st is least restrictive). Moreover, tariff faced by agricultural goods is 0.3 percent and by Haiti has a low 15 percent maximum MFN applied non-agricultural goods it is 0.8 percent (down from tariff, excluding alcohol and tobacco, and its 67.2 12.4 percent in 2007). In nominal terms, the Haitian percent share of tariff lines with zero MFN tariff is the gourde depreciated by 6.1 percent against the U.S. highest in the region. Much the same as the majority dollar in 2008, making exports cheaper in foreign of other countries in its comparator groups, Haiti is currency terms.2 more protective of its agricultural products (with a MFN tariff of 5.7 percent) than of its non-agricultural Haiti has initialed a comprehensive Economic ones (2.4 percent). The government’s trade policy Partnership Agreement (EPA) with the EU as part of space, as measured by the wedge between bound and the CARIFORUM EPA group, at the end of 2007. applied tariffs (the overhang), is 15.7 percent. Based However, it did not sign the agreement with the other on the extent of its trade liberalization in services, CARIFORUM states in October 2008, though it has Haiti ranked 80th out of 148 countries according to the pledged to work on ensuring that conditions for its GATS Commitment Index. joining the EPA are established.3 Since Haiti has initialed the EPA it continues to benefit from the In response to the food crisis, CARICOM heads of preferences under the Africa, Caribbean, and Pacific state agreed in March 2008 to a two-year suspension (ACP)-EU Cotonou Agreement. Haiti’s textile exports of the CET so that member governments can drop will benefit from the expansion of duty-free access to duties as needed to counteract rising food prices. The the U.S. market until 2018, which the U.S. Congress CET on a range of infant juices was also suspended approved in 2008 through an amendment of the for a period of 6 months up to September 2008. Hemispheric Opportunity through Partnership Furthermore, the Haitian government introduced Encouragement.4 Behind the Border Constraints Unless otherwise indicated, all data are as of August 2009 and are drawn from the World Trade Indicators 2009/10 Haiti remains in the bottom 20 percent of Database. The database, Country Trade Briefs and international business environments in 2009, being Trade-at-a-Glance Tables, are available at ranked 151st out of 183 countries in the Ease of Doing http://www.worldbank.org/wti. Business index. Additionally, Haiti’s Logistics Performance Index (LPI) score, which reflects the If using information from this brief, please provide the extent of trade facilitation in the country, is below the following source citation: World Bank. 2010. “Haiti regional and income group averages, reflecting a less Trade Brief.� World Trade Indicators 2009/10: Country Trade conducive climate for trade. Haiti scores 2.21 on a Briefs. Washington, DC: World Bank. Available at scale of 1 to 5, with 5 being the highest score, while http://www.worldbank.org/wti. World Trade Indicators 2009/10 Haiti Trade Brief the regional and income group averages are 2.57 and partner. Remittances are an important source of 2.29, respectively. Haiti ranked 123rd out of 150 ranked income in Haiti, accounting for 18.7 percent of the countries and 20th in the LCA region (with Chile GDP in 2008. FDI inflows into the country in 2007 leading the regional group). Its strongest LPI indicator were a low 1.1 percent of GDP. is domestic logistics costs, while its weakest is efficiency and effectiveness of customs and other border procedures. Notes 1. FAO, 2009. 2. IMF, August 2009. Trade Outcomes 3. European Commission, July 2009. Haiti’s trade growth, in real terms (constant 2000 US 4. EIU. August 2009, p. 13. dollars), has slightly accelerated from an average rate 5. EIU, August 2009, p. 7. of 2.3 percent over the 2005–07 period to an estimated rate of 2.7 percent in 2008. But this is expected to turn negative in 2009, due to a projected References decline in trade in goods and services. The acceleration Bridges. November 2008. “EU, Former Colonies Sign in 2008 was influenced by marginal rises in the growth First New Generation Trade Pact�. Bridges 12(5). rates of both exports and imports (from 2.4 percent to International Centre for Trade and Sustainable an estimated 2.5 percent and from 2.3 to 2.7 percent, Development. July 20, 2009. . In nominal terms, Haiti’s trade growth rate increased Economist Intelligence Unit (EIU). August 2009. to an estimated 16.1 percent in 2008 from 7.7 percent “Country Report: Haiti.� EIU. the year before, on the back of acceleration in growth European Commission. July 2009. “Africa, Caribbean, rates of exports and imports (from 4.8 percent in 2007 Pacific: Regional Negotiations of Economic to an estimated 10.8 percent in 2008 and from 8.7 Partnership Agreements.� European Commission. percent to an estimated 17.8 percent, respectively). August 19, 2009. . with a steeper decline in the nominal growth rate of Food and Agriculture Association of the United Nations imports. Already in the first quarter of 2009, imports (FAO). 2009. “Policy Measures Taken by have fallen by 13.9 percent year-on-year mainly as a Governments to Reduce the Impact of Soaring Prices result of declining food prices.5 The decline in exports (As of 15 December 2008).� FAO. June 26, 2009 is partially accounted for by the fall in external demand . from the United States, which is Haiti’s main trading